Domino’s Pizza, the American Pizza restaurant chain, reported earnings earlier this week and beat consensus estimates on the top and bottom line, with revenue of $566.7mm vs. consensus of $544.0mm and EPS of $0.96 vs. consensus of $0.90.
Hedgeye Restaurants analyst Howard Penney writes that this quarter was another example of what a company can achieve when bringing quality and value to the consumer with the convenience of a single click, text, tweet, or voice command.
NOTABLE COMPANY THOUGHTS
- “I continue to think 1,000 additional stores domestically is a possibility, as volumes go up and our share goes up that only creates the opportunity to build more store.”
- “Getting a lead is one thing, maintaining it is another.”
- When asked about Olympics or Presidential debates having an impact on sales: “I don’t think this is material, at the margin it could have an effect but nothing material.”
- When asked about the new salads: “this is something that may help the veto vote and provide another option for the family.”
- “This is about getting the fundamentals right and keeping this momentum going.”
- “I wake up every day and worry about cyber security and food safety; those always have to be top of mind.”
- “Customers continue to be a little bit cautious; we have been finding ways to create value for them. There is certainly over the course of the last few years been a little ticket growth, but the majority has been through orders and we think that is the healthy way to do it.”
Bottom Line
We don’t talk about DPZ often; it’s a great company that has dominated the pizza category for years by being number one in ease of use driven by market leading technology initiatives and perfecting the delivery business model. In this challenging time for restaurant traffic, it’s not surprising that DPZ, PZZA and WING (all three focuses on delivery) are three of the top four best performing restaurant stocks year-to-date.
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